Luberef Signs Contract to Expand Yanbu Facility

Saudi Aramco Base Oil Company (Luberef) has announced the signing of an Engineering, Procurement and Construction contract with PETROJET Co. for the expansion of its Yanbu facility (Growth II).

Covering the second phase of development, the Growth-II Expansion Project seeks to increase the Yanbu facility’s base oil production capacity to approximately 1.3 million metric tons per year by 2025. Additionally, the contract will further enable Luberef to flexibly produce Group-II and Group-III base oils based on market demands.

Luberef has initiated the engineering and construction agreement with PETROJET to increase the production of Group-II and introduce Group-III base oils, leveraging the improved capacity created by the project.

“We are proud of this agreement as it allows us to strengthen our production capabilities and grow in cohesion with shifts in the base oil industry,” said Tareq Al-Nuaim, President and CEO of Luberef. “Globally, Group-III base oil prices have maintained a steep premium in comparison to Group-I and Group-II prices over the past year in response to steady supply and rising demand. Through this project, we are proud to enhance our Yanbu Facility, process more products and support the Kingdom’s economic growth as a result.”

PETROJET is one of the largest full-service construction groups in the MEA area, providing integrated services to projects in the oil, gas, and petrochemical industries.

Fahad A. Al Therwi, Vice President of Engineering Projects at Lubref, commented: “We are pleased to move forward with the next stage of our expansion with a company of PETROJET’s caliber on board. The second phase of development will further strengthen Lubref’s industry-leading capabilities and boost capacity in support of the Kingdom’s ambitious future. I look forward to working closely with PETROJET to bring this important project to fruition.”

Located on the Red Sea coast of Saudi Arabia, the Yanbu Facility was officially commissioned in 1997 with an initial production capacity of approximately 300,000 MT of Group-I base oils. Following the ‘Growth-I Expansion Project’ completion in 2017, Luberef increased the base oil production capacity at the Yanbu facility from 300,000 MT/y to 1.07 million MT/y.

With the first expansion project, the facility’s infrastructure was developed to allow the production of Group-II base oils for the first time in Saudi Arabia. The Yanbu facility had previously produced aramcoDURA 150, aramcoDURA 500 and aramcoDURA BS 150 until November 2017, when it underwent the first phase of its expansion.